Pakistan is still a poor country but it has now a teledensity fo 22% (22 phone connections per 100 persons). You can read a press release from Pakistan Telecommunication Authority and if you think that it is government propaganda to increase the image of the country then you better believe Reuters, one of the most credible news agencies in the world. The main growth has come in the mobile phone sector and Pakistan has now 27 million mobile phone connections. There is surely a lot of room for growth in a country with more than 160 million people. Realizing this opportunity, Nordic and Arab telecom companies are investing heavily in the Pakistani telecom sector. Orascom Telecom, Etisalat, Telenor, Warid Telecom are the major foreign companies operating in Pakistan's telecom sector.
At the beginning of the current fiscal year (July 1 2005), the number of mobile phone connections was 13 million and by 31 March 2006 the figure has increased to 27 million. Just 2 years ago, teledensity in Pakistan was just 4% and after 2 years from now it will reach to 35% if the current growth in telecom continues. Only 5-6 years ago, mobile phone was expensive in Pakistan and it was a status symbol in the Pakistani society. Fierce competition among the mobile phone companies has drastically reduced the expense of owning and operating a mobile phone. Now, many street vendors use mobile phones to keep contact with their families and also maintain business communication.
Pakistan's example should be a lesson to all the big mobile phone companies. If the mobile phone companies can come out with packages that are affordable to the ordinary people then mobile phone companies will not have to worry about suffering recessions for a long time.
Perhaps Pakistan should also be a lesson to legislators and regulators. As I blogged
http://blogs.nmss.com/communications/2005/12/mobile_phone_ad.html
about Pakistan’s mobile market back in December,
"…real changes happened in 2004. First, in April the government granted two more licenses . Telenor won one of those licenses, built a network and launched services in February 2005. Warid won the other, launching services in April 2005. Second, in June 2004 the government abolished the remaining restrictions on foreign direct investment permitting foreign investors to retain 100% equity in their investments. And third, they dropped the activation tax to Rs. 500 (~ $ 8) .
The winning formula seems to be:
1. Rampant competition - preferably more than 4 providers.
2. Zero restrictions on foreign investment.
3. Little or no industry-specific taxes on telecom.
Also, a minor arithmetic note... Surely 27M subscribers in a population of 160M or 162M means 17% not 22% teledensity?? Have I missed something?
But nice post and very nice blog.
Thank you,
Brough Turner
Posted by: Brough Turner | April 19, 2006 12:47 PM | Permalink to Comment